ols Attempts Keep the Highest 12 12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuty if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However , similar to bonds, preferred stockholders receive a fixed payment--their dividend-before the company's residual earnings are paid out to its common stockholders and, as with common stock, preferred stockholders can benefit from an appreciation in the value of the firm's stock securities Consider the following case of International Imports (12): 7. ced International Imports (12) pays an ann dividend rate of 10.40% on its preferred stock that currently returna 13.94% and has a par value of $100.00 per share. What is the value of tz's preferred stock? $111.91 per share $74,61 per share $100.00 per share 589.53 per share Suppose that due to high inflation, interest rates rise and pull the preferred stock's yield to 18.12%. The value of the preferred stock will